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Expected slippages in farmland values in the Yorkshire and Humber region have not materialised, with agents reporting a year of record-breaking prices despite falling commodity returns, rising interest rates and a scaling back of direct payments.
Political uncertainty and an impending general election may influence market sentiment in 2024, but land prices in the region are predicted to strengthen further as renewables, housebuilding and carbon offsetting compete for agricultural acreage.
See also: Farmland market – supply, demand, influences and values
Strong bidding and good prices
Tom Watson, director, Cundalls
Two of our completions in early 2023 reflect well the strength of the market in the region.
We saw a dozen or more bids placed for an equipped 120-acre farm, pushing the sale price to 20% over guide, and a similar level of interest in a let Agricultural Holdings Act (AHA) investment farm, with more than a dozen buyers at a “non-binding” phone auction.
That sale was achieved at a price that was more than 50% above guide, despite the figures confirming a yield of just 0.6%.
There was strong bidding too for a let AHA investment farm of more than 400 acres in East Yorkshire which we acted on for a purchaser, with the sale price again showing a yield of under 1%.
A business person with no knowledge of farming might look at the returns on land investment and suggest that buyers ‘’must be mad”, but there is far more to owning land than return on investment.
In the long term, land usually turns out to be a sound investment.
Demand for best land still rising
James Walton, partner, Brown & Co
We have seen a busy and buoyant trading year in the Yorkshire and Humber area.
A modest increase in publicly marketed land has been met by a robust marketplace, a varied pool of buyers and, in some cases, record prices achieved.
Private transactions continue to be a very important part of the market – we have been involved in more in the region this year than open market sales.
These sales come about for reasons such as neighbouring landowners seeking expansion, inter-family transactions and sales to sitting tenants.
Market values show a greater disparity between the most sought-after land and land in lower demand.
This comes at a time when poorer quality land is considered to have greater environmental credentials and should be worth more, but while government policy can change, land quality doesn’t.
Without doubt, the demand for the best land continues to rise and we expect this gap to be maintained as buyers become more discerning in their requirements.
What sold in 2023
Low Kiplin Farm © Cundalls
Low Kiplin Farm, Northallerton, came to the market as a 190-acre equipped farm with a house and buildings, let on an AHA 1986 tenancy with an annual rental income of about £10,000.
Cundalls sold it as a whole at substantially over the £1m guide to an investment buyer with a farming background.
Wetwang House Farm © Brown & Co
Wetwang House Farm, Wetwang, Driffield, generated a large number of viewings and offers for its meticulously presented 352-acre block of Grade 2 land.
The farm was sold to a local farming family as a whole by Brown & Co at well beyond its guide price of £4.35m.
What’s on the market
Land at Ampleforth © Cundalls
Cundalls is handling the sale of 392 acres of arable, pasture and woodland at Ampleforth.
The land comes with more than 50,000 sq ft of buildings and is part-let on a Farm Business Tenancy until 2027, earning £31,109 a year. The agent is looking for offers of more than £3m, as a whole or in four lots.
Starcross Farm © Brown & Co
The sale of Starcross Farm, Epworth, offers a ring-fenced, environment-focused opportunity. The 250-acre block of bare land generates a significant Higher Level Stewardship income.
It has a reservoir and scrapes for wading birds in situ. Brown & Co is marketing it at a guide price of £1.9m.
Land sales |
|
| Acres advertised in 2022 | 7,100 |
| Acres advertised in 2023 | 3,000 |
| Farms launched in 2022 | 15 |
| Farms launched in 2023 | 9 |
Land value 2023 |
|
| Average price paid for arable land | £11,000/acre |
| Highest price paid for arable land | £15,000/acre |
| Average price paid for pasture land | £8,500/acre |
| Highest price paid for pasture land | £9,000/acre |
| Source: Regional pricing data supplied by Strutt & Parker is for blocks of more than 100 acres. 2023 data is for January to end-September | |
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